Tuesday, September 6, 2022

Wilmington's Lie - A Review


David Zucchino, Wilmington’s Lie: The Murderous Coup of 1898 and the Rise of White Supremacy, (NY: Grove Atlantic Press, 2020)

In Wilmington’s Lie readers get a historical account of race relations and the overthrow of Democracy by white supremacists in 1898 Wilmington, North Carolina. Zucchino has a brief prologue introducing the violent day of November 10, 1898 and a brief epilogue at the end of a 352 page narrative divided into three chronological parts. Part I has 62 pages in eight chapters that narrate Wilmington from the end of the Civil War to March 1898. Part II has 120 pages and 17 chapters that narrates the period from March 1898, until election day November 8, 1898. Part III has 163 pages in 12 chapters that returns to the post-election day of November 10, 1898, and onward into a narrative account of the violent aftermath of election day and the end of voting for black people in the south.

Part I gives a view of Wilmington life when former slaves had jobs and some freedom, liberty and civil rights as a legacy of reconstruction. Readers meet some of the white and black people that will be part of the narrative in Part II and III. These are especially Alfred Moore Waddell, known as Colonel Waddell, a white supremacist, Josephus Daniels, a white supremacist newspaper owner-publisher and later a cabinet member for President Woodrow Wilson, and Alexander Lightfoot Manly, a black journalist.

Part II moves along covering key events in the campaign to overthrow democracy and end black voting in Wilmington. Readers learn the depression of 1893 left rural whites so impoverished they voted with the freed slaves and progressive whites to elect Republican candidates and defeat the white Supremacist democratic party in some local and state offices like Wilmington. Blacks outnumber whites in Wilmington: 11,324 black, 8,731 white.

To the white supremacist’s black participation was “negro domination” that could not be tolerated. These Part II chapters gives dates and details of events in the campaign to suppress black voting in the months leading up to the November 8, 1898 election. It gives details of organizing white racist men into a para-military force of Red Shirts.

On August 18, 1898 multiple North Carolina newspapers published remarks of Rebecca Latimer Felton who demanded “The black fiend who lays unholy and lustful hands on a white woman in the state of Georgia shall surely die!” She wanted black man seen with a white women to be lynched. Alexander Manly published a reply to Felton in his newspaper the Daily Record. His reply included “Tell your men that it is no worse for a black man to be intimate with a white woman, than for a white man to be intimate with a colored woman.” Manly’s reply turned into an excuse to rally white supremacists.

On October 24, 1898 Colonel Waddell spoke at Thalian Hall in Wilmington, N.C. where he claimed whites endured “intolerable conditions” imposed on whites by the “ragged rabble of negroes.” . . .  “We are resolved to change them, if we have to choke the current of the Cape Fear with carcasses.” These two episodes illustrate a small part of the campaign of various white men and their varied plots to promote fear through speeches and newspaper stories that included false claims that blacks were planning a violent uprising with intention to kill whites.

Zucchino includes efforts by blacks and some white Republicans to contact President McKinley and North Carolina governor Daniel Russell to intervene, but to no avail. The white supremacy campaign succeeded. Few blacks were able to vote and the white supremacist Democrats were swept into office.

Part II ends with the November 8 election and Part III narrates the violent aftermath. Prevailing in the elections did not remove all blacks from elected office or appointed jobs, or put them in their place. Stealing the election without outside opposition only emboldened the white supremacists to further violence against blacks. Beginning November 10, a white mob of Red Shirts encouraged by Colonel Waddell burned the Manly newspaper offices. From that Red Shirts invaded black neighborhoods shooting and killing black men hopelessly outgunned. Zucchino takes three chapters and 39 pages narrating the day’s violence and slaughter of blacks.

After the killing stopped armed white supremacist groups patrolled the streets while people like Colonel Waddell removed the elected government, some white and some black, and targeted other blacks and whites to banish from Wilmington under threat of death. The Red Shirts roamed about and much of the terrified black community fled to the surrounding forests and swamps. Zucchino narrates the stories of these events and the narrow escape of Manly and others.

The white ministers and others celebrated the return of white supremacist rule. Five days after the killings Josephus Daniels staged a celebration attended by thousands he titled a “Victory, White Supremacy and Good Government Jubilee” at Raleigh. Visitors arrived on reduced fare trains greeted with flaming tar barrels and bonfires. Fireworks lit up darkening skies on a crisp autumn evening. “Every man had a torchlight which gleamed and blinked like the eye of some mighty cyclops,” Daniels newspaper reported.

Zucchino goes on to explain the timid and failed effort of President McKinley and his administration and Governor Daniel Russell to make any response to the killings and end of Democracy and to explain the long term method to end black voting for seventy years. The U.S. Constitution demands the federal government guarantee a Republican form of government in the states. Instead it would be Jim Crow, the poll tax and the literacy test where the white supremacists devised a crude method to have illiterate whites vote by allowing a literacy test exception for those who had parents or grandparents that voted before 1867.

Zucchino writes a thirty-three page epilogue that allows comparing the present attitudes and voter ID laws in the context of the past, and recounts events from a hundred anniversary observance in 1998. In 2000 the North Carolina legislature sponsored a state commission to investigate the cause and effect of the 1898 coup that is available on the Internet. The report concluded the coup was a documented conspiracy. There was also student protest in 2015 at the University of North Carolina objecting to buildings named after white supremacists. All of the principal figures are dead by 2020 but Zucchino ended the book reviewing some post-coup d'état history and interviewing some remaining family members, especially of Josephus Daniels and Alex Manly, in an apparent search for regret, but regret implies change of heart which never comes easily.

The Book Wilmington’s Lie starts with a good title. It happens often that people of influence with the opportunity to do the right thing, who then choose the wrong thing, want to cover it up with excuses and delete it from history as happened with Wilmington. It took a hundred years before an accounting and Wilmington’s Lie should be considered a thorough and orderly accounting of it, although not the only one, it is the latest one.

The book reads easily in well organized short chapters that maintain a readable narrative style. The writing avoids academic excess. Chapter titles often identify an event or subject in the chapter to come. Zucchino avoids moralizing and leaves the reader to judge the evidence, which he documents carefully. The book includes a lengthy bibliography.

As the story moves along I would say the narrative has embedded in it the chronology of steps needed for a coup d'état. A coup d'état requires one or a few completely unscrupulous authoritarian leaders-demagogues to unify a group by embellishing their grievances, perverting the facts, and encouraging their hatred toward a definable target. Targets are usually racial minorities although it could be elite’s, religious groups, immigrants and others. Democracy needs persuasion and a majority, but a coup d’etat needs the unifying power of hatred and it needs violence and assassination to generate fear in the majority. A coup d’etat brings minority rule where fear subdues the majority into passive acceptance. Just talking and speeches do not succeed in that the victims can not be easily deceived with the lies and misconduct going on around them. Patience will be necessary because it takes time to convince authoritarian followers they can murder their hated targets without consequence, and for the majority to convince themselves to do nothing about it. It is worth noting that Wilmington and the atrocities there preceded Adolf Hitler and deserve comparison to Trump. The book received recognition with a Pulitzer Prize, which it deserved, but even so it is a sobering account for a country claiming to be a democracy.

Sunday, July 24, 2022

Kill Switch - A Review


Adam Jentleson, Kill Switch: the Rise of the Modern Senate and the Crippling of American Democracy, (NY: Liveright Publishing Corp, 2021) 254 pages

In his new book, Kill Switch, Adam Jentleson writes a history of the filibuster as it evolved and continues to evolve for use by a Senate minority to stall and defeat a majority. Jentleson worked as a staff member for Senator Harry Reid from 2010 until Reid retired in 2017. The book has nine chapters between an introduction and conclusion. Part I, the Rise of the Filibuster, has four chapters with the history of filibustering from its early 19th century use until 1964. Part II, Tyranny of the Minority, has five chapters explaining the use and abuse of the filibuster between 1964 and the present.

The rules that govern Senate operation have varied over the years, but Jentleson documents the filibuster rules and how their use has damaged democracy and majority rule from one era to another.  The Part I chapters begin with a selection of quotations from the Federalist Papers to develop the arguments of James Madison, Alexander Hamilton and others from the 1787 Philadelphia convention. Their arguments supported majority rule by elected representatives; there was no filibuster in 1787. Readers learn how a “previous question” rule in the initial Senate rules worked to end debate and proceed to a vote.

Next we meet Senator John C. Calhoun and his idea that Senators are entitled to hold the floor for unlimited debate. Jentleson devotes more than twenty pages for discussing the 19th century Senate contest over majority rule between Senator Calhoun and his allies and Senator Daniel Webster, Henry Clay and their more numerous allies. Their inconclusive contest continued into the 20th Century when readers meet Rule 22 and its 1913 origins in the Wilson administration.

Rule 22 allows senators to call for a vote to end a filibuster; a vote they defined as “Cloture.” While the previous question rule wrapped up debate Rule 22 required a vote by a 2/3’s super majority to end debate. The committee that devised the rule called it a tool to “terminate successful filibustering” except that it turned into a powerful method for the south to block legislation intended to provide constitutional rights to the black community. Here Jentleson develops 1922, 1937, and 1940 efforts to pass an anti-lynching bill and 1942, 1944, and 1946 efforts to end the poll tax. All were defeated by southern filibusters.

We meet Senator Richard Russell of Georgia in these contests and his determination to use the filibuster to get his minority way over civil rights. Jentleson reviews the history of failed attempts by Senator Paul Douglas, Hubert Humphrey and others to get rid of Rule 22. Discussion shifts to Senator Lyndon Johnson of Texas and his successful efforts to cozy up to Russell. Johnson realizes he cannot be elected president as a southern racist and Jentleson takes his readers through the Johnson transformation to civil rights advocate. The Master of the Senate ended a southern filibuster for the first time ever and steered the 1964 Civil Rights Bill in law.

The Part II chapters explain what happens “when the filibuster was streamlined so that it could be used against any issue, by leaders wielding unprecedented top-down control.” After describing Senator Harry Reid’s successful 2013 scheme to end the filibuster for presidential nominations, which the press dubbed “going nuclear,” Jentleson identifies those in the super-minority that obstruct the Senate. They are WWAC – White, Wealthy, Anti-Choice, and Conservative. Discussion includes their connection to racial prejudice.

We meet the Tea Party of 2009 and some examples of their obstructionist tactics, which Jentleson argues resulted from using the polarizing innovations of Jesse Helms. Readers learn of Helms direct mail fundraising, filibustering methods and polarizing views. Discussion includes his help electing Ronald Reagan and his choice to attack abortion as a source of political power.

In Chapter 7, the Means of Control, Jentleson returns to Senate history with a brief narrative of Senate leadership through the years until getting to Lyndon Johnson’s innovations of the 1950’s and 1960’s. Johnson turned the Senate majority leader into a position with legislative power by doling out committee assignments, but there would be more changes after 1980.

Between 1980 and 2018 the Senate changed parties nine times, giving Republicans a chance to apply the Johnson methods for their own purposes. However, the “insecure majorities” turned the Senate into a continuous campaign of political attacks and aggressive fund raising. Harry Reid took over as Senate majority leader for the 110th Congress in 2007 and Jentleson narratives his strategies and methods in the Senate, described as the greatest consolidation of congressional power since Newt Gingrich ruled the House.”

Readers meet Mitch McConnell during this discussion - lawyer, former state judge, and Senator from Kentucky since 1985 – and learn of his flip-flopping views for and against campaign finance and the filibuster. After using the filibuster against Senator McCain’s campaign reform and losing he decided to support an end to the filibuster to prevent Democrats from blocking Republican judicial appointments. The Democrats, always playing defense, would not go along. Jentleson documents all the judges the Democrats opposed were confirmed anyway.

Harry Reid continued as Senate majority leader through the 113th Congress of 2015-2017. Jentleson narrates these years where Harry Reid struggles to get President Obama’s agenda and nominations through the Senate. These were the years of unprecedented Republican obstruction. The narrative has the details of the Harry Reid versus Mitch McConnell battle over health care, nominations including the Merrick Garland nomination and others.

These later chapters explain the new filibuster and how it empowered people like McConnell to block everything, anytime. After 1964 the filibuster lost its southern, civil rights identity after rules changes allowed the Senate to move to other business without ending a filibuster. More changes allow the Senate majority leader to set the floor schedule for the Senate by unanimous consent. The filibuster lost its name entirely as a single objector could have a bill taken off the schedule by placing “a Hold.” An email “hotline” allows any Senator to place a hold as an unaccountable and unpublicized secret.

In addition to the filibuster Jentleson fills in the obstructionist details of the Obama years. The details include McConnell’s efforts to unite the Republican establishment with the Tea Party extremists and his efforts to pacify Trump with everyone. McConnell succeeded by comes off as a competitor without a conscience. In conclusion there are a few suggestions to save the Senate. Getting rid of the filibuster heads the list, which could be done easily. He sees the filibusters as the prime cause of minority rule, although not the only one. The majority leader’s absolute power over the Senate schedule is another.

The book does a good job documenting the history and destructive effect of the filibuster. It reads easily and sources are cited in notes, allowing further reading. The political history of the Congress over the last thirty years proves the Democrats have failed miserably while defending the filibuster, a conclusion I had before reading this book. I benefited from previously reading Martin B Gold & Dimple Gupta’s 2005 piece cited in discussion: “The Constitutional Option to Change Senate Rules and Procedures: A Majoritarian Means to Overcome the Filibuster”. Even so there was lots of filibuster material new to me and I especially like having my conclusions confirmed with the documented account and evidence here.

The filibuster can only be defensive but a poor defense at that, even accepting defense as a good strategy, which I do not believe it is in 2022 if ever. The Democrats need to be deciding and defending what they think is right. While Jentleson worked for Senator Reid and clearly admires him, Reid’s nuclear option feels defensive and timid. Democrats need to move over to offense. Kill Switch will help convince you of that.












Tuesday, June 28, 2022

Labor History and the Supreme Court Abortion Ruling


Labor History and the Supreme Court Abortion Ruling

I would like to suggest a connection between labor history and the recent Supreme Court decision concerning abortion rights; this being a labor blog. Labor history has a long record of vigilante violence and authoritarian misconduct going back into the 19th century. Throughout labor history mob violence directed at strikers and picketers seldom occurred as spontaneous response to the events of a strike. Corporate interests with the economic power to assert authority took repeated steps to organize and arm vigilante forces to break strikes, and their recruits recognized their recruiters had the political power to protect them from criminal prosecution. Corporate officials acted with confidence and impunity to assert the authoritarian power of a police state while avoiding any compromise that democracy might generate.

For at least fifty years abortion opponents have demanded, without a hint of compromise, that a fertilized egg at the time of conception will be the same thing as an eight or nine month fetus about to be born. Such a view can only prevail in a police state or a country like the United States with a paralyzed Senate, a “we do as we please” majority on a Supreme Court and a Republican Party determined to corrupt free elections.

It was true in 1973 as it is true in 2022 that the Constitution has nothing to say about abortion, but the Senate and the Congress, then as now, can be blocked and paralyzed by minority rule. The few who have bothered to read the Roe v. Wade opinion know that Justice Blackmun wrote a long historical discussion of the pros and cons of abortion before coming to a compromise ruling in between the extremes of fanatics. Justice Blackmun did what democracy should be able to do, and the Senate and the American Constitution cannot do: compromise. The U.S. Constitution is obsolete and desperately needs to be amended or replaced. The current episode should make clear it has defects capable of bringing down constitutional government, not just majority rule.

On January 6, 2021, Trump supplied the authority for his base to attack the capital and extensive video footage establishes they acted with confidence and impunity as a violent band of hooligans expecting to be protected by Trump as part of their devotion to his authoritarian ways. The Supreme Court intends and expects their rulings on guns and military assault weapons, such as the recent move against gun safety in New York, will be used by armed vigilantes as an aid to enforce their decision on abortion, and other decisions to come, the same as labor history records.

The Supreme Court majority in the 1857 Dred Scott decision expected to resolve the polarized politics of slavery, but all they did was debase themselves, the Court and push the country to a violent civil war. Now, another Court majority expects to end the abortion fight with an authoritarian political ruling. There is a difference though. Then Supreme Court Chief Justice Roger Taney discussed their upcoming ruling with President James Buchanan. They were both foolish enough to believe the Supreme Court had the prestige to resolve what political compromise could not do.  

Not now. Now they have eliminated the Roe v. Wage compromise of 1973 and made the political decision to encourage and promote civil warfare as leverage to get their way. In 2022, these police state justices know exactly what they’re doing, they just don’t care.

Saturday, May 7, 2022

Taxing Dividends or Not

Taxing Dividends or Not

Recall the George W Bush era 2003 tax cuts came with a ten year expiration date, a necessary concession to get the additional votes for passage by Congress. If the expiration date passed without a legislative renewal, then the Personal Income Tax reverted to what it was right before the Bush tax cuts. Negotiations for renewal and adjustments began as the 2013 deadline approached, which created a position of enormous advantage for President Obama. All he had to do was let the thing expire and keep talking if he could not get the changes he wanted. If he had done that, one especially disgusting feature of the Bush tax cuts would have expired with it. The especially disgusting feature favored income earned from corporate dividends with lower tax rates that did not, and still do not, apply to wage income, or social security income or pension income.

A dollar of personal income provides a dollar of spending power without regard to its source or label. Taxing dividends less than wages has no financial advantage funding government, but it cuts tax rates in favor of those with stock portfolios rather the jobs with wages. It makes the federal personal income tax less progressive, or regressive – tax rates fall as incomes rise - and means those with the same income will pay different taxes depending on how they earn their income rather than how much.

In 2003, the first year of the Bush Tax cuts, the tax rate on general dividend income was capped at 15 percent. A worksheet – Qualified Dividends and Capital Gains Tax Worksheet-Line 41 - was added to the Form 1040 instructions with an algorithm that separated dividend income from other taxable income. Taxable income without the dividends was taxed at rates starting at 10 percent and rising to 35 percent for taxable income over $311,950, while dividend income was taxed at 15 percent, or 20 percent lower than the 35 percent applied to the highest personal income. Since the median family income in 2003 was $43,318, the 20 percent rate reduction applied for those with taxable income over $311,950, which means a large savings for the highest incomes. Many years of annual tax savings reinvested in the stock market year by year might be a tidy little nest egg. However, there is no reason to speculate how much it might be. It is not difficult to generate dollar amounts from the tax rate schedules and stock market returns for the years 2003 to 2022.

Suppose a married couple both in the teaching profession in 2003 had a typical median salaries providing a joint taxable income of $110,000.  In the first year a married couple with jobs paying a joint taxable income from wages of $110,000 would pay a federal personal income tax of $21,120. If our married couple had $10,000 of their $110,000 income as dividends their tax bill would drop $1,000 to $20,120 because their marginal tax rate dropped from 25 percent to 15 percent. In 2003 that $1,000 would have purchased just over 39 shares of Microsoft Corporation stock at $25.08 a share, the price on April 1, 2004. On April 1, 2022 the 39 shares had a value of $12,024.09. (1)

Since the tax cut on dividends continues to the present, suppose tax savings on $10,000 of dividends as part of a taxable income of $110,000 continued to be $1,000 a year for 15 years until 2017. For the remaining years after the Trump tax cuts the 15 percent marginal rate dropped to 12 percent leaving the tax savings at $700 a year. If our hypothetical couple continued purchasing shares each April they would add to their 39 shares from 2003. By doing so until April 2022 they would own 497 shares of Microsoft stock worth $153,397.83.

Suppose a married couple both in a professional occupation like law, engineering or medicine where median salaries of $125,000 in 2003 provide a joint taxable income of $125,000. In the first tax cut year 2003 a married couple with a joint taxable income from wages of $250,000 would pay a federal personal income tax of $63,945.17. If $25,000 of the $220,000 was dividend income the personal income tax for 2003 drops by $4,500.00 to $59,445.17. The $25,000 of dividend income presumes a stock portfolio of $1,000,000 and a 2.5 percent yield on dividends would be reasonable for a professional couple of forty years of age. If, as above, our wealthier couple continues to reinvest tax savings on $25,000 of dividend income year by year until 2021 they would own 2,186 shares of Microsoft stock worth $674,084.00: funds they would not have from wage income alone.

In 2003, the 2002 tax rates were lowered for personal income above $46,700, but excluding dividend income. The $46,700 was a little above the median family income at that time. The top rate was lowered from 38.6 percent to 35 percent, where it stayed until 2013. The top rate was 39.6 percent from 2013 until 2017 when the Trump tax cuts cut it to 37 percent. These rates apply to those with high taxable incomes: $311,950 and higher in 2003 up to $628,300 and higher in 2021. It is for these incomes that the tax savings for dividend income over such a long period as 2003 to 2022 can become enormous.

Married couples with personal income ranging above $628,300 can be expected to have a stock portfolio in six or seven figures. Interest rates on savings, CD’s and bonds at historically lows and the steady rise in the Standard and Poors or Dow Jones industrial index, guarantees the well-to-do were putting lots of financial capital into stocks. Dividend income during these years provided a secure and steady return even without considering capital gains, also taxed at the same favorable rate as dividends.

Suppose we figure the tax savings from taxable income of $700,000 and $100,000 of dividend income by assuming a $4,000,000 portfolio at 2.5 percent dividend and ignores any capital gains. The savings in the first year are $20,000 but dips below $17,000 in the later years as marginal rates dropped in the Trump years. Again if we have our hypothetical couple continue purchasing shares with their annual tax savings each April until 2022 they would own 9,871 shares of Microsoft stock worth $3,043,486.45.

Suppose though we talk about the very rich and start them out in 2003 with $2,500,000 in taxable income and $1,500,000 in dividend income. If all the $2.5 million of taxable income paid tax at the same tax rates as wages the personal income tax would be $850,206.50, but with $1,500,000 as dividends the personal income tax drops to $550,206.50, a savings of $300,000 dollars given the tax rate for dividends drops from 35 percent to 15 percent. In 2003 that $300,000 would have purchased just over 11,961 shares of Microsoft Corporation stock at $25.08 a share, the price on April 1, 2004. On April 1, 2021 the 11,961 shares had a value of $3,687,695.91. Again if we have our hypothetical couple continue purchasing shares with their annual dividend tax savings each April until 2021 they would own 148,018 shares of Microsoft stock worth $45,635,408.08.

Dividend tax savings and the advancing inequality they create have brought to America a new term: the Teardown. Tear is a verb with synonyms cut, split, lacerate, rip, sever, cleave, rend, shred or pull apart. In the new United States, the Teardown has become a noun that defines a house about to be demolished and replaced in the same space with another house between four and eight times bigger. In Arlington, Virginia in the 1950’s and 1960’s the Broyhill family built thousands of 1,400 to 1,800 square foot one story rambler and two story colonial homes. They were brick and block three bedroom homes with basements that included necessary plumbing and electricity to finished off, which many families did. In 2003 these homes would sell in the $350,000 range and by 2020 many of them sell for $1,000,000, but they are fast disappearing.

Drive or walk through north Arlington and there will be treeless squares of plowed ground along streets in every neighborhood where the day before there stood a Broyhill rambler, Broyhill colonial or other 1950’s brick and block home. Wealthier neighborhoods have become construction zones with mostly Hispanic crews coming to build 7,500 to 10,000 square foot mansions.  They generally have boxy shapes where the zoning permits an average four-corner height of forty feet. They have finished space in basements and typically three finished above ground floors with six and seven bedroom, six, six and a half baths and two or three car garages. Yard space shrinks but these homes always include elaborate driveways, walkways and landscaping on what space remains.

Some of the builders find a Teardown house for a client and some build for speculation. The replacement mansions sell quickly with little in the way of bargaining and the new owners soon contract with landscaping and housekeeping services to keep houses, lawns and gardens in glorious perfection. Other crews arrive with ladders and lifts to install elaborate holiday lighting or equipment for party events. These “transition” neighborhoods feature a steady stream of UPS, FedEx, and Amazon delivery vans with drivers who scurry up the walkways balancing the days pile of boxes. Lots of cardboard fills recycling tubs.

Arlington County government makes it convenient to study this new trend by graciously putting building and demolition permits in a downloadable text file for importing into an Excel spreadsheet. The files have application and approval dates, project address, and a description of the project along with contractor information. For a file with permit application dates from June 2019 until June 2021 I found 465 records from a filter containing DEMO for demolition and SFD for single family dwelling. Demolition valuations given in the file were typically $10 to $15 thousand.

The buyers of Arlington mansions tend to be empty nest couples moving into their mansions after the kids are gone. No one will ask them if two people need a six or seven bedroom house, it’s impolite and probably embarrassing among the always appearance conscious well to do. No one dares to say these people have too much money, there is no such thing among the well-to-do of the 21st century.

In his 1946 autobiography national journalist and writer William Allen White wrote that the “decade which climaxed in 1912 was a time of tremendous change in our national life[.]  . . . “The people were questioning the way every rich man got his money.” . . . “Some way, into the hearts of the dominant middle class, of this country, had come a sense that their civilization needed recasting, that their government had fallen into the hands of self-seekers, that a new relation should be established between the haves and the have nots[.]” (2)

American politics no longer supports a constructive discussion of inequality and the well-to-do work to avoid and evade discussion of class, they prefer to advertise their class in silence from their mansions. William Allen White would have no trouble informing these new mansion dwellers they got rich and joined the upper class exploiting tax favors not usable by the working class. Mr. White would not regard their conspicuous consumption as a result of work in a meritocracy. No doubt some of them give a can of corn to the Thanksgiving food drive and donate to water conservation and the fair housing fund, but dividend tax breaks debase work and the people who work for a living. They ought to be smart enough to know the dangers of extreme inequality and take some responsibility for the country’s bitter and angry divisions and the peril it brings.

For the first ten years of Bush tax cuts the wealthy paid a rate of 15 percent on dividends instead of 35 percent at the highest marginal tax rate. While President Obama could have attacked the whole idea as an indefensible attack on working families, he did not. Instead he negotiated an increase of the marginal tax on dividends to 20 percent for 2013 taxable incomes over $450,000 while raising the highest tax bracket on taxable income from 35 to 39.6 percent. For my hypothetical couple with $2.5 million of taxable income and $1.5 million of dividend and capital gains, their tax savings dropped from $300,000 to $294,000. Apparently $6,000 of additional taxes on $2.5 million of taxable income passes for Democratic Party liberalism in 2013. 

(1) All dividend shares and values were, and can be, verified on spreadsheets

(2) William Allen White, The Autobiography of William Allen White,  (NY: The MacMillan & Co, 1946), p. 427-429